SEC Interventions and the Frequency and Usefulness of Non-GAAP Financial Measures
Ana Cristina Marques
NOVA School of Business and Economics
July 26, 2005
AAA 2006 Financial Accounting and Reporting Section (FARS) Meeting Paper
This paper examines the effect on both firms and investors of two SEC regulatory interventions related to disclosure of non-GAAP financial measures. There are three main results. First, both periods after the SEC's interventions are associated with a decrease in the probability of disclosure of non-GAAP financial measures and this decline accelerates through the period. Second, all else equal, investors do not value firms higher or lower because of the disclosure of non-GAAP financial measures. Finally, investors accept as generally transitory the adjustments to GAAP income made by I/B/E/S financial analysts, but not the additional adjustments made by firms.
Number of Pages in PDF File: 48
Keywords: non-GAAP financial measures, Regulation G, disclosure
JEL Classification: M41, M45, G12, G29, G38working papers series
Date posted: March 30, 2005
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